White House Warns of Job Losses Under Sequester

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Werfel said hundreds of thousands of federal employees would have to be furloughed, although agencies would have some discretion over exactly when the cuts would take place. Agencies under the law could wait to implement cuts in hopes that Congress reaches a deal, but Werfel warned “hope” wouldn’t be enough, and they would have to plan to ensure the $85 billion cut takes place by Sept. 30.

Werfel also warned that because of the mindless nature of the sequester, agencies would not be able to spare programs, even if they are a higher priority. For instance, he said the FAA would be prohibited from sparing air traffic control spending by shifting cuts to other areas.

Furman did not provide an estimate for job losses and the impact on the Gross Domestic Product beyond saying hundreds of thousands jobs would be lost. He said the economy got a taste of the impact in the fourth quarter of 2012, when defense cuts were the difference between a growing GDP and a shrinking one.

Furman also said that now is a particularly bad time for the sequester to take effect; the economy is growing and the deficit is shrinking already. The administration took credit for the steepest drop in the deficit as a percentage of GDP since World War II.

Among the cuts the White House warned about Friday are:

• 70,000 children kicked off Head Start, 10,000 teacher jobs “at risk” and funding for 7,200 special education teachers and staff cut.

• 373,000 people losing access to mental-health treatment.

• 1,000 fewer federal agents at the FBI and other federal agencies.

• Hundreds of federal prosecutors furloughed, leading to more than 1,000 fewer criminal prosecutions.

• Thousands of fewer federal research grants at the National Institutes of Health and the National Science Foundation.

• Reduced staffing at the IRS, which the White House warns would lead to delayed customer service and cost the government billions in uncollected revenue.

House Republicans have argued that the revenue issue is settled and are demanding Obama come up with alternate cuts, noting that they have done so. Obama, however, has demanded a “balanced” plan that would replace the sequester with a combination of cuts and revenue. One side will have to blink for the latest game of budget chicken to end, but House Republicans so far appear more inclined to let the sequester take effect rather than submit to more tax increases.

Democrats are clearly trying to pressure Republicans into considering a sequester fix that would include some revenue. In addition to the Office of Management and Budget call on Friday, the Senate Appropriations Committee has a Feb. 14 hearing planned on the sequester, intended to emphasize the effects it would have on the daily lives of many Americans. The headlines generated by the OMB release and hearing could trigger tough questions for many lawmakers during their talks with constituents during the late February recess.

Senate Democrats also intend to finish as early as next week a short-term sequester replacement bill aimed at combining alternative spending cuts and new tax revenue to avert the $85 billion in automatic spending cuts that would take place this year. The president earlier this week advocated for such a measure as a way to avoid what he said would be dire consequences for the economy.